Levin Stresses Middle Class Benefits in Tax, Trade Policy

New House Ways and Means Committee Chairman Sander Levin, D-Mich., said he is focusing on the middle class as he leads the panel in formulating tax and trade policies.

One of the major items on the committee agenda is addressing tax cuts approved during the Bush administration that are set to expire this year. As Congress begins those talks, Levin hopes to help Americans that he asserts President George W. Bush left behind.

Levin told a luncheon April 19 that people in the top 1 percent of earners garnered two-thirds of the increase in national income during the last economic expansion, from 2001 to 2007, while everyone else saw their wages stagnate.

“The divergence of income we have seen in the last decade means that we should keep the middle income tax cuts and let those for the very wealthiest expire,” said Levin, who assumed the chairmanship of the tax-writing committee when Rep. Charles Rangel, D-N.Y., stepped down amid ethics investigations on March 3.

Congress also must deal with the estate tax, where a previous reduction expired in January. Levin said the limbo surrounding the levy is “unacceptable and unfair” and is resulting in a situation in which “children may well be left with nothing.”

Levin acknowledged that the politics of tax cuts will be difficult to navigate and will push larger reforms off to 2011.

“It isn’t easy,” Levin said. Expiring tax cuts must be “the first order of business. Comprehensive tax reform is an issue for next year, not this year.”

He dismissed one idea that is floating around Capitol Hill -- a value-added tax.

“I’ve not heard anyone within (Democratic) ranks discuss it,” Levin said. “My guess is that by next week, it’s a goner, and that’s for good reason.”

Levin gave a more hopeful outlook for legislation that extends individual and business tax cuts -- such as a research and development tax credit -- that expired in December. The House and Senate have each passed bills that would continue those reductions.

“These bills are being worked on right now, and with the small business infrastructure jobs bills, need to be passed and sent to the president before Memorial Day,” Levin said.

Reflecting the wide jurisdiction of his committee, Levin’s speech covered many topics. On trade, he also emphasized benefits to the middle class.

Levin criticized the Bush administration for promoting a “hands off” trade policy that only focused on increasing exports rather than helping people who are hurt by global economic competition.

“We need to both expand trade and spread its benefits more broadly and ensure that American workers and American businesses are competing on a more level playing field,” said Levin, who charged that trade agreements with Panama, Colombia and South Korea contain “flaws” pertaining to workers’ rights and foreign market access that “need to be fixed.”

An important step in making the global economy more equitable would be for China to let the value of its currency rise, according to Levin. Such a move would make U.S. exports more competitive.

“China has rigged its currency,” Levin said. “It’s been part of their strategy. It has to change.”

Levin said that the Obama administration is pursuing a multilateral strategy to address the issue.

“If it doesn’t work, then the U.S. -- Congress and administration -- will act,” Levin said. “I have no doubt about it.”